Complainant

Respondent

Parties

Fionnan  Martin

Denis Mahony Limited

Complainant

Respondent

Representatives

 Michael J. Ryan Solicitor

 No Representative

Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00040141-001

29/09/2020

The Complainant was employed by the Respondent as a sales executive on the 31st March 2018 and he was dismissed on the 14th April 2020. He was paid €3,250 gross per month. He is claiming that he was unfairly dismissed. The Respondent said he was dismissed for reasons of redundancy.

The Complainant said in evidence that he worked for the Respondent in Lexus sales and he was very happy there. He said that he got a telephone call from the Sales Manager Mr. McDermott in mid-April to tell him he was being let go because of the Covid restrictions. At the time the business was closed due to the Covid restrictions. He asked him if he could be put on the Covid payments.  Mr McDermott told him he would tell Mr. CM to discuss it with him. He said that he had no further contact with the Respondent and he did not receive the letter of the 15th April which was submitted in evidence by the Respondent. He said that he would have been happy if he had been put on the Covid payments.  He said that he did not receive any written statement from the company about his dismissal until his solicitor contacted the company. He said that there were no procedures applied to the dismissal and there was no attempt made to keep him employed. He said that at the time the Government was providing financial support to employers to retain employees during the Covid lockdown. He said that he was the only employee made redundant. He said that the company hired a new employee in the area he worked in around September 2020.

The Complainant’s solicitor submitted that there were no procedures to the dismissal and there was no objective assessment of the situation. The Respondent was influenced by his experience in the previous recession and gave no other reason for selecting the Complainant for redundancy. He submitted that other measures should have been adopted such as the wage subsidy scheme, lay off and the Lexus host position. 

The Respondent company is involved in selling the Lexus and Toyota car brands. Mr Kevin McDermott, Sales Director, said in evidence that the business was closed due to the Covid-19 pandemic on the 23rd March 2020 and he had no idea when it would open. He worked in Lexus sales with the Complainant and another employee. There were 3 employees on the Lexus sales team and 4 employees on the Toyota sales team.  The company branch sold about 100 Lexus per year whereas the Toyota had sales of 700 to 800 cars per year.

The Sales Director said that a decision was taken at board level to make the Complainant redundant. He said that they had no idea when the business was reopening and given his experience of the last recession he considered it was better to make him redundant than put him on lay-off.  He said that it was easier for the Complainant to get the Government PUP payment than it was for the company to access the Government Covid supports for businesses. He said that the Covid financial supports was based on the previous year turnover and theirs was too high for the first quarter of 2020 to qualify for it and it was difficult to access it. The company paid all the employees for the month of April and they then they got the Government the business supports after the rules of the scheme was changed.  

The GM said that the Board did not consider lay-off as an alternative to redundancy.  He said that the decision was made based on last in first out and the Complainant selected as he had 16 months service and the other employee in Lexus sales had 40 years’ service.  He said that there were 3 employees from the service department also made redundant and 2 employees from another branch.

The Sales Director said that he telephoned the Complainant on the 14th April to tell him that he was being made redundant and he sent a letter to him the following day. He gave him 2 weeks’ notice and paid him to mid-May. He said that he did not consider consulting with the Complainant before making the decision. He said that he could not meet him because of the Covid restrictions. He said that the business reopened after 8 weeks. They had 2 people in Lexus sales and they took on a Lexus host (a receptionist job) in September 2020. He said that the Lexus company required them to have a Lexus host and it was on cards for 2 years. He said that the Complainant was not trained for the job, but he accepted that he did it occasionally. He did not consider the Complainant for the job.

Mr. Frank Dunne, Branch Manager, said in evidence that Covid was the only reason for the redundancy. He said that there were no employees made redundant from the Toyota side of the business. He said that they did not discuss any alternatives to redundancy.

Section 6 of the Unfair Dismissals Act, 1977 provides:

“(1)   Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal. …

Selection for Redundancy

Sub section (3) Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—

(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

(b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts, 1941 and 1971, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there

were no special reasons justifying a departure from that procedure, then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.

 (4) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:

……

……

(c) the redundancy of the employee,

……

(6) In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal.

(7) Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so—

(a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and

(b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in section 14 (1) of this Act or with the provisions of any code of practice referred to in paragraph(d) (inserted by the Unfair Dismissals (Amendment) Act, 1993) of section

Section 7(2) of the Redundancy Payments Act 1967 as amended provides:

 “(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned] the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained,”

Section 11. Lay-off and short-time:

(1) “Where an employee's employment ceases by reason of his employer's being unable to provide the work for which the employee was employed to do, and—

(a) it is reasonable in the circumstances for that employer to believe that the cessation of employment will not be permanent, and

b) the employer gives notice to that effect to the employee prior to the cessation, that cessation of employment shall be regarded for the purposes of this Act as lay-off.”

The submitted that the Complainant was dismissed for reasons of redundancy because the business was closed due to Covid 19. The Complainant disputes the need for redundancy and stated that there were no alternatives to redundancy considered.

Section 7(2) of the Redundancy Payments Acts cited above sets out 5 situations where the redundancy of the role of an employee may arise. The Respondent put forward none of these situations as justification for the redundancy.  The reason given for the redundancy was the Covid lockdown. The Sales Director said that he had no idea when the company could reopen, and the last recession was on his mind when he made the decision to make the Complainant redundant. I note that the Complainant was the only person from either the Lexus or Toyota sales teams made redundant even though the whole business was temporarily closed. The business re-opened in May and all the sales team returned to work.  The Government introduced a temporary wage subsidy scheme (TWSS) to assist employers to keep their employees on the payroll during the covid-19 pandemic.  I note from the letter of dismissal to the Complainant that that he was not registered by the company for Covid payments. I note from the evidence Sales Director that it was easier for the Complainant to access PUP than it was for the Respondent to get TWSS. I note that neither a temporary lay-off as provided for in Section 11 of the Redundancy Payments Act cited above, or the TWSS payments were considered for the Complainant as an alternative to redundancy. Furthermore, the Respondent filled the position of Lexus host (receptionist) a position which had been required to be created by Lexus company and had been in the offing for 2 years. The Complainant’s evidence is that he occasionally carried out the duties of this post and could have been considered for that job.

There is an onus on employers to consider alternatives to redundancy. The Complainant was not consulted, and he was made redundant without any opportunity to make suggestions on alternatives to redundancy.  The caselaw on this point is very clear. 

In Mulligan –v- J2 Global (Ireland) Ltd (UD/993/2009), in respect of redundancy the EAT stated:

“In cases of redundancy, best practice is to carry out a genuine consultation process prior to reaching a decision as to redundancy. While in some cases that may be no viable alternative to the making of one or more jobs redundant, whatever consultation process is carried out, the employer who fails to carry out a consultation process risks being found in breach of the Unfair Dismissals Act as such a lack of procedure may lead to the conclusion that an unfair selection for redundancy had taken place.”

In JVC Europe Ltd v Ponisi [2012] ELR 70 it was highlighted that it might be "prudent and a mark of genuine redundancy that alternatives to letting an employee go should be examined” and that "a fair selection procedure may indicate an honest approach to redundancy by an employer". It went on to state that where "selection procedures for redundancy are laid down in the conditions of employment of an employee, whether by collective agreement or individual employment contract, these should be followed."

In Mulcahy vs Kelly [1993] ELR 35 it was noted that "it is well established that there is an obligation on an employer to look for an alternative to redundancy,"

In Boucher v Irish Productivity Centre UD882/1992 a decision on the requirement of consultation, the EAT, in holding the dismissal unfair said: "it is not for the Tribunal to consider whether input would have made any difference, but its denial is a denial of the right of the natural and constitutional right to defend oneself which is not at the gift of the employer or of this Tribunal but is vested in every citizen no less in any enquiry affecting their employment, than when the enquiry might affect their liberty.” 

In the case of Trinity College v Ahmad UDD2030 in relation to selection for redundancy, the Labour Court followed the reasoning of the EAT in the case of Gillian Free v Oxygen Environmental UD 206/2011, and noted:

“when an employer is making an employee redundant while retaining other employees, the selection criteria being used should be objectively applied in a fair manner. While there are no hard and fast rules as to what constitutes the criteria to be adopted nevertheless the criteria adopted will come under close scrutiny if an employee claims that he/she was unfairly selected for redundancy….where there is no agreed procedure in relation to selection for redundancy….then the employer must act fairly and reasonably”.

The Labour Court went on to say that:

“It is clear to the Court that sufficient efforts were not made to seek alternative roles for him, the Court therefore, cannot accept that his dismissal by virtue of fair selection for redundancy had been discharged by the Respondent and consequently finds that the Complainant was unfairly dismissed”.

Applying the above case-law to the case herein, I find that the failure of the Respondent to consider any alternatives to redundancy was totally unreasonable. Furthermore, the Respondent failed to establish that the circumstances pertaining in the business at the time of the dismissal, satisfied any of the 5 situations where the redundancy of the role of an employee may arise in accordance with Section 7(2) of the Redundancy Payments Acts cited above. I am satisfied therefore that no genuine redundancy situation has been established. Consequently, I find that the Complainant was unfairly dismissed.

Where there is a finding of unfair dismissal redress which can be awarded. Section 7(a) of the Unfair Dismissals Act, 1977 as amended provides:

 Redress for unfair dismissal.

7.— (1) Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the adjudication officer or the Labour Court, as the case may be, considers appropriate having regard to all the circumstances:

 (a) re-instatement by the employer of the employee in the position which he held immediately before his dismissal on the terms and conditions on which he was employed immediately before his dismissal together with a term that the re-instatement shall be deemed to have commenced on the day of the dismissal, or

(b) re-engagement by the employer of the employee either in the position which he held immediately before his dismissal or in a different position which would be reasonably suitable for him on such terms and conditions as are reasonable having regard to all the circumstances, or

 (c) (i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17   of this Act) as is just and equitable having regard to all the circumstances, or

(ii)   if the employee incurred no such financial loss, payment to the employee by the employer of such compensation (if any, but not exceeding in amount 4 weeks remuneration in respect of the employment from which he was dismissed calculated as aforesaid) as is just and equitable having regard to all the circumstances,

The Complainant said at the hearing that he was amenable to re-instatement. The Respondent said that he believed re-instatement was not possible because there may be bad feelings due to this complaint. I cannot see any reason why this case would be a bar to re-instatement. Having considered the views of the parties, all the circumstances and evidence in this case, I believe that the appropriate remedy is reinstatement to the position he held at the date of the dismissal. Accordingly, I therefore order the re-instatement of the Complainant.

Unfair Dismissals Act 1977 – unfair selection for redundancy, Covid-19 - failure to consider alternative to redundancy, lay-off, redress - reinstatement